REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Christopher Kennedy, Economic Development Project Manager
Subject:
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Public Hearing to Adopt Resolution No. 2025-52 for Annual Assessment Approval in the Huntington Beach Downtown Business Improvement District for Fiscal Year (FY) 2025-2026
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Statement of Issue:
On September 2, 2025, the City Council adopted Resolution No. 2025-51 declaring its intention to levy an annual assessment for the Huntington Beach Downtown Business Improvement District (District) and scheduled a public hearing for October 7, 2025. Each business within the District is charged an annual fee, which the City collects and distributes to fund services that go beyond the City’s standard baseline services for this area.
The City Council is now requested to conduct the public hearing and consider adopting Resolution No. 2025-52 to approve the FY 2025-26 assessment.
Financial Impact:
The District’s FY 2025-26 budget, submitted by Downtown HB, includes projected revenues of $972,445, of which $115,000 is expected from business assessments. The remainder will come from other revenue sources such as events and sponsorships.
The City’s FY 2025-26 Operating Budget (Fund 710: Huntington Beach Downtown Business Improvement District Fund), includes $125,000 in revenue and matching expenditures related to District activities.
Recommended Action:
recommendation
A) Conduct the Public Hearing; and,
B) If written protests from businesses representing 50% or more of the total assessment are not received, adopt Resolution No. 2025-52, “A Resolution of the City Council of the City of Huntington Beach Approving an Annual Assessment within the Huntington Beach Downtown Business Improvement District for Fiscal Year 2025-26.”
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Alternative Action(s):
The City Council may amend elements of the Annual Report, such as fees, activities, improvements, or district boundaries, and update the Resolution accordingly. However, the City Council may not increase assessments or expand district boundaries as part of this action.
If written protests are received from business owners representing more than 50% of the total assessment value, the City Council may not approve the Resolution.
Analysis:
Background
The Huntington Beach Downtown Business Improvement District (District) was created in 2004 to support services that enhance the downtown area, such as safety, marketing, and maintenance, beyond the City’s baseline levels.
In 2008, the City Council appointed Downtown HB, a nonprofit formed by local businesses, as the District’s Advisory Board. The Advisory Board makes annual recommendations regarding:
• How funds should be spent.
• Potential changes to assessment amounts or boundaries.
The City Council reviews and approves these recommendations through a public meeting.
The City and Downtown HB operate under a formal agreement that outlines their roles in managing the District. Downtown HB is responsible for managing collected funds and ensuring they are used exclusively to benefit the businesses in the District.
Annual Report & FY 2025-26 Assessment Budget
Downtown HB proposes continuing its initiatives to maintain a clean, vibrant, and welcoming environment for residents and visitors. The Advisory Board recommends the following allocation of the $115,000 in assessment revenue:
• Ambassador Security Program - $35,000 (30%): Safety ambassadors assist visitors, deter nuisance activity, and support HBPD. Expanded weekend and event coverage began earlier this year.
• Holiday Beautification - $25,800 (22%): Holiday lighting, snowflakes, and a tree on Main Street. New decorations will extend to the fourth block of Main Street this year.
• Enhanced Maintenance - $21,000 (18%): Additional cleaning and porter services during peak weekends and large events.
• Community Events - $18,000 (16%): Events like the Independence Day Block Party, Surf City Spooktacular, and Magic on Main Street.
• Marketing - $10,000 (9%): Supports digital ads, social media, website content, and email campaigns.
• CRM Software - $3,000 (3%): Stakeholder database and vendor tracking for outreach and participation.
• Financial Services - $2,200 (2%): Third-party accounting for financial accuracy and compliance.
The total proposed budget for FY 2025-2026 is $972,445 (Page 20 in the Annual Report), which is an increase of $61,343 from the previous year. There is also $163,570 in unallocated reserves, available for future needs. Additional revenue sources include events like the Surf City Artisan Fair, Surf City Nights, and the City’s contribution for maintenance services.
District Renewal
Per state law, the submitted Annual Report includes:
1. No changes to the District’s boundaries or benefit zones
2. A list of planned improvements and estimated costs
3. The method used to calculate each business’s assessment
4. Any surplus or deficit from the prior fiscal year
5. Revenue sources beyond the business assessments
Currently, approximately 255 businesses pay annual assessments ranging from $80 to $1,404, plus a $12 processing fee. There are no proposed changes to the assessment formula or boundaries this year.
Protests & Public Hearing Procedure
Business owners may submit written protests if they oppose the proposed assessment. Protests must be submitted by the business owner (or their designated agent) as shown in City records. Protests may be withdrawn at any time before the close of the public hearing.
If written protests representing 50% or more of the total assessments are received, the City Council must not proceed with the levy of the assessments for FY 2025-26. If the protests pertain only to a specific service or activity (e.g., holiday decorations), that activity must be removed from the budget.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(4), government fiscal activities that do not result in a physical change in the environment and do not commit the lead agency to any specific project, do not constitute a project. Therefore, these activities are exempt in accordance with CEQA Guidelines Section 15060(c)(3).
Strategic Plan Goal:
Goal 1 - Economic Development, Strategy A - Develop an updated economic development strategy to ensure business retention, local investments and job growth.
For details, visit www.huntingtonbeachca.gov/strategicplan.
Attachment(s):
1. Resolution No. 2025-52
Exhibit A: Annual Report and Proposed Budget for FY 2025-2026
Exhibit B: Boundary Map, Business List, and Assessment Schedule
Exhibit C: Improvements and Activities Proposed to be Funded
2. PowerPoint Presentation